Madoff Records Are "Utterly Unreliable"

Arthur Levitt, Banking Crisis, Bernie Madoff, Carlyle Group, Christopher Cox, Ponzi Scheme, Wall Street Fraud
bab

Dec. 17 (Bloomberg)Bernard Madoff’s ability to avoid scrutiny from U.S. regulators for years shows that the monitoring system is “broken and has to be fixed,” former Securities and Exchange Commission Chairman Arthur Levitt said.

Levitt, a senior adviser to Carlyle Group, said today in a Bloomberg Radio interview that the SEC must respond to allegations that it failed to act on tips of wrongdoing by Madoff that it had received since the 1990s.

“The system is obviously flawed and it’s got to be rethought in terms of how investors can be protected,” Levitt said. SEC Chairman Christopher Cox “is doing the right thing” by calling for a probe of the agency’s role, Levitt said.

Madoff was arrested Dec. 11 after telling his two sons and federal investigators that he’d been using money from new investors to pay off old ones in a Ponzi scheme. He said clients of his New York-based investment-advisory firm lost $50 billion.

Levitt said Madoff may have run a conventional business for a while and “shifted gears,” when the market turned against him. Madoff “clearly lied” to avoid registering with the SEC, which has shrunk as the financial industry has grown, Levitt said.

In 2004, the agency had 477 people in its inspection office, overseeing about 8,000 investment advisers, Levitt said. Today, 430 people regulate 11,300 advisers, along with about 16,000 mutual funds, he said.

Cox said yesterday the SEC failed to act for almost a decade on “credible and specific allegations” against Madoff. He announced an internal probe to review the “deeply troubling” revelations.

Levitt is a board member of Bloomberg LP, the parent company of Bloomberg News.

US Anti-Kidnap Expert Kidnapped in Mexico

Drug Cartels, Felix Batista, Mexico
US anti-kidnap expert kidnapped
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drug

A US anti-kidnapping expert who has negotiated the release of dozens of hostages in Latin America has been abducted by gunmen in Mexico.

Felix Batista, a Cuban-American from Miami, was kidnapped as he stepped outside a restaurant to answer a phone call in the northern city of Saltillo.

Drug gangs are blamed for hundreds of kidnappings in Mexico each year.

More than 5,000 people have been killed in drug-related violence between rival cartels this year.

Mr Batista is credited with negotiating the release of many kidnap victims.

He was in Saltillo, in Coahuila state, to offer advice on how to deal with kidnaps for ransom when he himself was seized last Wednesday, local authorities revealed on Monday.

Support for family

Charlie LeBlanc, president of Houston-based security firm ASI Global LLC, where Mr Batista is a consultant, said: “We have notified the FBI and Mexican authorities, and they are working on the case.

“We are offering our support to the family and hoping for the best.”

He declined to say whether the kidnappers had demanded a ransom.

The US embassy in Mexico City said it was investigating and would not comment further.

Hundreds of people are kidnapped in Mexico every year.

The number of victims has increased sharply following an army-backed crackdown on drug gangs, which has forced cartels to seek new ways of making money to fund their operations.

Rezco Sentencing Indefinately Postponed

Barack Obama, Chicago, Corruption, Tony Rezco
December 16, 2008


A federal judge has indefinitely postponed the Jan. 6 sentencing for Tony Rezko, the prominent political fund-raiser and former adviser to Gov. Blagojevich.

The move this morning came after Rezko lawyers asked U.S. District Judge Amy St. Eve last week to throw out the sentencing date.

Rezko’s request comes as he restarts talks with federal prosecutors. Those talks hit a stumbling block as Rezko asked to be let out of solitary confinement at the downtown federal lockup. He asked for a rushed sentencing in January.

But last week’s revelation that the government has recordings in the governor’s case, appeared to change Rezko’s mind about cooperating.

Rezko’s lawyers did not ask for a new sentencing date at this morning’s hearing

SEC Under Scrutiny in Madoff Case

Bernie Madoff, Fraud, Grassley, Madoff Securities, Palm Beach, SEC, Wall Street, Wiesel. Spielberg, Zuckerman

Senator: The SEC “Letting Down the American People”

mad-money

ABC NEWS

By BRIAN ROSS and RICHARD ESPOSITO

Dec. 15, 2008—

As the list of victims continues to grow and investigators examine how Bernard Madoff allegedly ran his massive scam, some are questioning how Madoff avoided detection for so long. As a registered investment advisor since 2006, he was subject to scrutiny by the Securities and Exchange Commission, yet he managed to maintain a clean record even after complaints from whistleblowers started nine years ago.

“The Securities and Exchange Commission is letting down the American people,” Sen. Charles Grassley (R-Iowa) said of the SEC. “They failed. This person was registered as a broker dealer, they should have known what he was doing all the time, and particularly if you have whistleblowers.”

The head of enforcement at the SEC attempted to duck questions about the failure of the agency to detect what may be the biggest investment fraud in history.

“It is hard to directly respond given the fact that so much of what we have done historically is non-public and needs to remain non-public until someone decides otherwise,” said Linda Thomsen.

Meanwhile, the list of Madoff’s victims keeps growing. European banks have lost billions, as have charities run by Elie Wiesel, director Steven Spielberg, and New York billionaire Mort Zuckerman, whose charitable trust lost $30 million.

Authorities say Madoff didn’t hesitate to scam even close friends and fellow members of the Palm Beach Country Club.

“They’re going to have to sell their 20, 30 million dollar mansions,” said Larry Leamer, author of “Madness Under the Royal Palms”. “It’s all over. Some of these people crazily put all their money with him so they’re finished.”

Some Were Sent a Warning Sign on Madoff

While many trusted Madoff with their life savings, others were sending out a warning signal. The research firm Aksia, which also provides advice to pensions, endowments, foundations and insurance companies, says it has long been steering clients away from Madoff’s hedge fund based on a “host of red flags.”

According to a letter to its clients, Aksia “published extensive reports on several of the ‘feeder funds’ which allocated their capital to Madoff Securities … Our judgment was swift, given the extensive list of red flags.”

Aksia said in its letter that when the firm checked the auditor of Madoff’s fund they found the operation was quite small, given the amount of money being handled.

The accounting firm, says Aksia, had just three employees, “of which one was 78 years old and living in Florida, one was a secretary, and one was an active 47-year-old accountant (and the office in Rockland County, N.Y., was only 13 ft x 18 ft large).”

New Yorkers Popping Pills Like Skittles

Anxiety, Banking, Big Pharma, Financial Meltdown, New York, Prescription Drugs, Wall Street

Anxious New Yorkers popping more pills

CRAINS NEW YORK BUSINESS

By Daniel Massey

Published: December 12, 2008

skylook

Prescriptions filled for anti-anxiety drugs, anti-depressants and sleep aids have surged in the city as New Yorkers struggle to cope with uncertainties brought on by the financial crisis.

The spike was particularly evident in September, when an economic tsunami bankrupted Lehman Brothers Holdings Inc., forced Washington to bail out insurer American Insurance Group Inc., prompted Bank of America Corp. to rescue Merrill Lynch & Co., and led Goldman Sachs Group Inc. and Morgan Stanley to reorganize as bank holding companies.

“If we looked to diagnose the city, I would say it has an anxiety disorder,” said Mel Schwartz, a psychotherapist with practices in the city and in Westport, Conn.

In September and October, prescriptions filled for sleep aids rose more than 7% to 366,870 compared to the same two-month period last year, according to data provided to Crain’s by Wolters Kluwer Health, a global provider of medical information. Prescriptions for anti-anxiety drugs rose 5% to 317,268, and anti-depressants were also up 5% to 926,654 in the two months in the city.

Taken alone, the September rise was sharper. As the financial world collapsed that month, New Yorkers filled 11% more sleep aid prescriptions and 9% more prescriptions for anti-anxiety and anti-depressant drugs than they had in the same period in 2007.

The increases come at a time when spending on all classes of prescription drugs has fallen across the country, as patients deal with tighter budgets. In the city, prescriptions for anti-anxiety drugs, anti-depressants and sleep aids had all dropped in August on a year-over-year basis before shooting up in September, according to the Wolters Kluwer Health data.

There’s no way to say with certainty that the increases are directly tied to the financial crisis. But anecdotal evidence from psychiatrists, psychologists and sleep doctors suggests that patient volume is up and that rarely does a session go by without discussion of anxiety over the faltering economy.

“It’s unusual for somebody to come in at this point and for the economic environment not to be on the list of things affecting them,” said Dr. Neil Kavey, director of the Sleep Disorder Center at New York Presbyterian Hospital Columbia University Medical Center. “It’s on everybody’s mind.”

Experts say it’s too soon to tell whether the trend will continue, but with news of layoffs and consumer spending worsening by the day, the psyche of the city remains fragile.

“There’s a sense of foreboding that what’s been going on in recent months is just the beginning,” said Dr. Charles Goodstein, clinical professor of psychiatry at New York University Langone Medical Center.

Chief Iraq War Cheerleader and D.C.'s Favorite Idiot Savant Plays Dress-Up in Afghanistan

Stories

ASSOCIATED PRESS

DECEMBER 14 2008

By JASON STRAZIUSO

PUSS

KABUL, Afghanistan (AP) – The men around Lindsey Graham ignored his powerful political title – U.S. senator – and their own douchechills -instead addressing him by rank – colonel.

Graham, a Republican from South Carolina and the only U.S. senator in the military’s Guard or Reserves, donned the Air Force’s camouflaged uniform for five days last week to serve in Kabul.

The senator enrolled in the ROTC in 1973 and has been in the Air Force Guard or Reserves as a military lawyer ever since. In Kabul, he worked with the staff of military lawyers at the U.S. base Camp Eggers. The office is helping to train military judges and defense lawyers, and to write Afghanistan’s uniform code of military justice.

Graham said his experiences in the military taught him how difficult wartime deployments can be on families.

“One thing I learned is that when a soldier, airman or a Marine is away, the more we can take care of the family, the better they’re going to be able to do their job because there’s nothing worse than being deployed and having family problems,” said Graham, a member of the Senate Armed Services Committee.

Graham said that when the military mobilized for the war in Iraq, about 20 percent of Guard and Reserve forces were medically disqualified. He said it wasn’t smart to have “20 percent of your force out of the fight without a shot being fired.” About 25 percent of the Guard and Reserves were uninsured.

In response, Graham worked with Sen. Hillary Clinton in 2005 to allow members of the Guard and Reserve to purchase health insurance for themselves and their families through TRICARE, the military’s health care system.

Seven years after the U.S. invaded Afghanistan to oust the Taliban for hosting al-Qaida chief Osama bin Laden, the United States has a record level of some 32,000 forces in the country, and American commanders have asked for 20,000 more. Violence has soared over the last two years.

Graham, who was in the capital from Sunday through Thursday, called the challenges in Afghanistan “enormous,” and said the U.S. “let some time get by” without enough focus on the country.

“It’s going to get tougher before it gets better. But we have a new strategy in place. Gen. (David) Petreaus understands how to win wars,” Graham said, referring to the chief of U.S. Central Command. “So I want the people of America to know we’re here to make our own national security better.”

The Taliban appears to be making gains in Afghanistan’s provinces, and more U.S. soldiers have died in Afghanistan in 2008 than in any year since the invasion, but Graham said history shows that the momentum in conflicts can turn quickly.

In 1987, Graham said, the Cold War between the Soviet Union and the U.S. was “vigorous.” By 1990, he pointed out, it was over.

“Momentum for evil or good can be powerful. Things can really deteriorate fast, but things can change and I’ve learned that in Iraq,” Graham said of the country, where violence has dropped quickly over the last year. Graham has also served time in Iraq in the Air Force Reserves.

The politician said his service in the military has made him a better senator.

“You don’t need to be in the military to be a good senator or president, but every experience you have helps you,” Graham said.

McCain Not So Much in Support of Palin For 2012

GOP, John McCain, Politics, Sarah Palin

your-mom

(CNN) — Sen. John McCain said Sunday he would not necessarily support his former running mate if she chose to run for president.

Speaking to ABC’s “This Week,” McCain was asked whether Alaska Gov. Sarah Palin could count on his support.

“I can’t say something like that. We’ve got some great other young governors. I think you’re going to see the governors assume a greater leadership role in our Republican Party,” he said.

He then mentioned governors Tim Pawlenty of Minnesota and Jon Huntsman of Utah.

McCain said he has “the greatest appreciation for Gov. Palin and her family, and it was a great joy to know them.”

“She invigorated our campaign” against Barack Obama for the presidency, he said.

McCain was pressed on why he can’t promise support for the woman who, just months ago, he named as the second best person to lead the nation.

“Have no doubt of my admiration and respect for her and my view of her viability, but at this stage, again … my corpse is still warm, you know?” he replied.

In his first Sunday political TV appearance since November 4, McCain also promised to work to build consensus in tackling America’s challenges, and criticized his own party for its latest attack on Obama.

McCain rejected complaints from the Republican National Committee that Obama has not been transparent about his contacts with Illinois Gov. Rod Blagojevich.

“I think that the Obama campaign should and will give all information necessary,” McCain told ABC’s “This Week.”

“You know, in all due respect to the Republican National Committee and anybody — right now, I think we should try to be working constructively together, not only on an issue such as this, but on the economy, stimulus package, reforms that are necessary.”

McCain‘s answer came in response to a question about comments from RNC Chairman Mike Duncan. The RNC also released an Internet ad last week, titled “Questions Remain,” suggesting Obama is failing to provide important information about potential links between his associates and Blagojevich.

Blagojevich was arrested Tuesday and charged with trying to trade Obama’s Senate seat for campaign contributions and other favors.

“I don’t know all the details of the relationship between President-elect Obama’s campaign or his people and the governor of Illinois,” McCain told ABC. “But I have some confidence that all the information will come out. It always does, it seems to me.”

McCain said he, like Obama and many other lawmakers, believes Blagojevich should resign.

Despite the heated nature of the race and attacks both former candidates lobbed at each other, McCain emphasized that he plans to focus on pushing lawmakers past partisan politics.

“I think my job is, of course, to be a part of, and hopefully exert some leadership, in the loyal opposition. But I emphasize the word loyal,” McCain said.

“We haven’t seen economic times like this in my lifetime. We haven’t seen challenges abroad at the level that we are experiencing, certainly since the end of the Cold War, and you could argue in some respects that they’re certainly more complex, many of these challenges. So let’s have our first priority where we can work together…

“Will there be areas of disagreement? Of course. We are different parties and different philosophy. But the nation wants us to unite and work together.”

McCain said he wouldn’t comment on whether he thought he had a good chance of winning the presidency, given the Bush administration and the GOP were perceived to be responsible for the economy’s problems. McCain said he would “leave that question” for others “to make that kind of judgment.”

He pointed out that his poll numbers dropped along with the Dow.

“That would sound like I am detracting from President-elect Obama’s campaign. I don’t want to do that… Nobody likes a sore loser.”

The key to moving past the stinging defeat, he said, is to, “Get busy and move on. That’s the best cure for it. I spent a period of time feeling sorry for myself. It’s wonderful. It’s one of the most enjoyable experiences that you can have.

“But the point is: You’ve got to move on… I’m still a senator from the state of Arizona. I still have the privilege and honor of serving this country, which I’ve done all my life, and it’s a great honor to do so.”